Sanaa, Yemen — Hopes for a negotiated settlement to Yemen’s mounting political crisis sank yesterday when President Ali Abdullah Saleh turned down for a third time a deal that would have offered him immunity from prosecution in exchange for stepping down.

The collapse of the Gulf-backed negotiations is the latest chapter in more than three months of steadily deteriorating relations between Saleh’s ruling party and the opposition, who despite numerous rounds of talks and increased pressure from the US and Europe have been unable to agree on a suitable transition deal.

With political negotiation failing, Yemen’s economy faltering, and tensions running high among protesters on the ground, analysts predict that this impoverished country may soon end up in the hands of Yemen’s fractious armed forces – which could in turn lead to civil war. A key question is whether those forces still loyal to Saleh will be willing and able to suppress the swelling levels of dissent against the regime.

“The level of restiveness in the military is as high as it is in the street and there’s no way of guaranteeing their loyalty,” says Abdul-Ghani al-Iryani, a political analyst based in Sanaa. “In Yemen we don’t really have a military as an institution, we have tribal factions in uniform, many of whom can be bought over to the other side. If he [Saleh] chooses to have a military showdown it will definitely be the end of this regime but also a lot of bloodshed.”

Yemen has the second-largest military force on the Arabian Peninsula (after Saudi Arabia) but for years it has been a fractious and divided entity. In mid-March those divisions were exacerbated when a string of senior military generals defected from the regime and declared their support for the youthful protesters seeking Saleh’s ouster.

Among them was Gen. Ali Mohsin, who controlled – and still controls – the First Armoured Division along with around 50 percent of the country’s military resources and assets. Since Mohsin’s defection there have been several bloody clashes with troops still loyal to the president.

Earlier this month Mohsin’s First Armored Division, Yemen's biggest division of regular forces, engaged in a four-hour shootout with government forces in a bid to defend a group of youthful protesters who came under fire from Saleh’s Republican Guard while marching on the Cabinet offices. Eighteen protesters were killed and hundreds wounded, including 25 soldiers, in the ensuing violence which raged on into the night.

Saleh still holds sway over a sizable chunk of the military; the loyalist forces of the Republican Guard and the Mountain Brigade are under the command of his sons, and his nephews command elements of the air force and special security forces.

“The majority of the military is with Saleh. Many of the defected officers you hear about are just people who were in the military in the past and now putting on their uniforms for show,” says Omar Mohammed, a Yemeni businessman and former military captain in Saleh’s elite presidential guard.

Low on military manpower?

But with the loss of Mohsin’s troops, Saleh’s forces are finding themselves increasingly on the back foot, overstretched and under-equipped as the government tries to deal with unrest that has spread through most of the country's cities.

Saleh's forces are now beginning to encounter resistance in rural areas as well; on May 10 anti-government tribesmen blocked a tank column traveling from the capital Sanaa to the eastern province of Hadhramaut, where protesters and rebellious tribes had gathered.

Local Arabic media have reported in recent days that Saleh is planning to field military cadets to bulk up his security forces, giving rise to suspicions that the regime may be running out of military manpower.

Analysts have also questioned whether soldiers of lower-rank will continue to heed the call to fire on unarmed protesters who have recently began escalating their protest efforts to include hunger strikes, the occupation of government buildings, and the blocking of ports and major roads.

“We are ready to defend ourselves by any means necessary," says Mr. Mohammed, the former captain. "But to kill an innocent we will not do for the president or for Allah. We will protect our president and land and people in a defensive manner.”